Who decides on the exchange rate?

No body can decide exchange rate for currency pairs. Even, government can't do it. Exchange rate based on on market demands. It's influenced by any issues. We can predict exchange rate by analyzing it's moving. Trader in FOREX (Foreign Exchange) usually use Technical Analytic and Fundamental Analytic to predict currency movement. It's need much time to learn this.

I'm interested to know as well. I'm really not sure but I would guess that is the job of the stock exchange??

hello lady, the foreign exchange is the market in which foreign currency—such as the yen or euro or pound—is traded for domestic currency. most of the trading is among banks, either on behalf of customers or on their own account. the counter party to the transaction could be another dealer, another financial institution, or a non-financial customer. some countries’ governments, instead of floating, “fix” their exchange rate, at least for periods of time, which means that the government’s central bank is an active trader in the foreign exchange market. the central bank buys or sells foreign currency, depending on which is necessary to peg the currency at a fixed exchange rate with the chosen foreign currency. one simple model for determining the long-run equilibrium exchange rate is based on the quantity theory of money. the domestic version of the quantity theory says that a one-time increase in the money supply is reflected as a proportionate increase in the domestic price level. international version says that the increase in the money supply is also reflected as a proportionate increase in the exchange rate. the exchange rate, as the relative price of money (domestic per foreign), can be viewed as determined by the demand for money (domestic relative to foreign), which is in turn influenced positively by the rate of growth of the real economy and negatively by the inflation rate. source: http://www.econlib.org/library/Enc/ForeignExchange.html source: http://definitions.uslegal.com/e/exchange-rate/ hey, all this i learned just now. have a nice day. ann

The exchange rate id decided by the international markets and how trade takes place . The way trade happens between USA and rest of the world is the main factor deciding the way the rate of a currency will fluctuate with respect to USD . No single person has the power to change the exchange rates . Trade is ultimately the main reason for this .